Medical Assistance (MA) Estate Recovery and Liens

Federal and state law require the Minnesota Department of Human Services (DHS) and local agencies to recover costs that the MA program pays for its members under certain circumstances. Local agencies are county and tribal agencies within Minnesota.

DHS and local agencies collect these costs in two ways: (1) estate recovery and (2) liens.

Estate recovery

Estate recovery is a law that requires local agencies to make claims against the estates of certain deceased MA members, or the estates of the deceased members’ surviving spouses, to recover the amount MA paid for certain health care services.

Estate recovery occurs only after an MA member dies. Local agencies cannot collect from an MA member’s assets for repayment of MA while the member is alive.

at 55 years old or older receive MA long-term services and supports (LTSS)

at any age permanently reside in a medical institution and receive MA services

If either of these situations occur, a local agency must claim against an estate after the MA member dies to recover what MA paid for LTSS. In addition, if the MA member was permanently institutionalized, the claim must attempt to recover the costs of all MA services (not just LTSS) that the MA member received during the period of institutionalization.

Physical therapy, occupational therapy and speech therapy, when the service is provided by a home health agency

Hospital and prescription drug services received during the time the MA member was provided nursing facility services or home and community-based services

If an MA member receives any of these LTSS at 55 years old or older, the cost of these LTSS can be recovered from the member’s estate after he or she dies.

If an MA member permanently resided in a medical institution at any age, the cost of all MA services received during the period of institutionalization, not just the cost of LTSS, can be recovered from the member’s estate after he or she dies.

Generally, estate recovery happens after an MA member dies. But, local agencies delay recovery if the deceased MA member is survived by a spouse or has a child who is under 21 years old, blind or permanently disabled.

Once a deceased MA member’s surviving spouse dies, local agencies are required to recover MA costs from the spouse’s estate. But recovery can be further delayed if a child who is under 21 years old, blind or permanently disabled is still living in the home when the surviving spouse dies.

Federal and state law require local agencies to try to recover from the estate of a surviving spouse.

This requirement comes out of a protection for the surviving spouse of a deceased MA member. When an MA member dies, local agencies cannot collect on an estate claim if a spouse survives the deceased MA member. If the surviving spouse receives assets from the deceased MA member’s estate, the surviving spouse can use the assets without having to repay MA for the deceased member’s health insurance costs while the surviving spouse is still alive.

Once the surviving spouse dies, though, a local agency can claim against the surviving spouse’s estate for repayment to the MA program.

No. An MA member’s children do not have to use their own assets to reimburse the state for any MA services the member received.

Local agencies that recover on an MA estate claim do so with priority over distributions to heirs. This means that MA should be repaid before heirs receive assets from the estate. Repayment of MA costs ensures that future MA members have funding to receive health care services.

DHS files two types of liens to secure repayment of MA: MA liens and notices of potential claim (NPCs). MA liens and NPCs have different impacts on MA members and their estates.

MA liens

An MA lien is a lien filed against an MA member’s real property interest before the member dies to secure repayment of all MA costs of the member’s permanent stay in a medical institution. The lien allows DHS to collect on the MA lien when real property is sold or transferred, which may happen before or after the member dies.

DHS files MA liens only after a member enters a “medical institution,” and the member’s attending physician, advanced practice registered nurse or physician assistant certifies in writing that the member is never expected to be discharged and return home.

Medical institutions include the following:

Nursing facilities

Skilled nursing facilities

Intermediate care facilities

Intermediate care facilities for people with developmental disabilities

An MA lien is enforceable for 10 years from the date of its filing. DHS may renew the lien for another 10 years.

NPCs

An NPC is a lien filed against a member’s real property interest to secure repayment of MA costs subject to estate recovery. DHS can file an NPC before, or within one year after, an MA member’s death.

An NPC is not a lien until the member dies. Until the member dies, the NPC serves only as notice that an MA estate claim could be made against a specific interest in real property in the future.

NPCs are enforceable for 20 years from the date of filing, or from the date of the member’s death, whichever is later.

Yes, DHS can collect on an MA lien before a member dies, but only for an MA member permanently residing in a medical institution.

Even if an MA member is permanently residing in a medical institution, the law prohibits DHS from filing a lien against the member’s real property in certain situations. For example, DHS cannot file a lien against the member’s real property if the property is the home of the member’s spouse. Also, DHS cannot file a lien if a child who is under 21 years old, blind or permanently disabled lives in the home.

No. Because a deceased person’s estate can include many assets that are not real property, DHS does not file liens against a person’s “estate.” DHS files liens only against real property that may or may not be included in a person’s estate.

The 2016 law change

No. It reduced the number of services for which costs can be recovered in an estate claim or notice of potential claim (NPC) starting January 1, 2014.

As a consequence of this law change, however, people who began receiving MA services other than long-term services and supports (LTSS) at 55 years old or older on or after January 1, 2014, are no longer subject to estate recovery and liens, unless they receive LTSS in the future or permanently reside in a medical institution.

Yes. DHS mailed a notice to any household in which a person received MA services other than long-term services and supports (LTSS) on or after January 1, 2014. This is approximately 816,000 households.

Getting advice about how to plan for MA estate recovery and liens

No. DHS and county agencies cannot answer “What if…?” questions about possible estate recovery or liens. DHS and counties are government agencies whose role prohibits them from giving legal advice to the public. Answering questions about how hypothetical future events may affect estate recovery or liens is legal advice.

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The terminology used to describe people with disabilities has changed over time. The Minnesota Department of Human Services (“Department”) supports the use of “People First” language. Although outmoded and offensive terms might be found within documents on the Department’s website, the Department does not endorse these terms.